"Let Me Start" tonight with this. Think a second. Think if this
election had gone the other way. John Bolton, not Susan Rice, would be the
hot talk for secretary of state. War clouds would be overhead and the
bugles blaring would be marching to Tehran.

Just think, self-deportation would be the name of the game with
immigration. Voter suppression would be the toast of the town, or at least
certain parts of town. The extinction of health care would be HR-1, right
up there on the front burner for congressional action.

Just think, if the election had gone the other way, the rich would be
basking in the best tax protection known to man, a real-life, genuine
mandate to leave them and their money alone.

But a funny thing happened on the way to the White House. People
voted for tax fairness. They voted to make the rich pay their share,
specifically voted that way, for one thing, because the Republicans kept
warning them not to.

And so it came to pass today that President Obama said just that at
his press conference, Give the middle class their tax cuts, Speaker
Boehner. Cut it loose so they can go Christmas shopping, Senator
McConnell. It`s what the people voted for. It`s why they voted for me.
That`s the president talking.

We`re joined right now by NBC`s White House correspondent, Chuck Todd.
Chuck, thanks for joining us tonight.

This was a hot pressure cooker press conference, and you were right in
the middle of it. Let`s talk about the president`s tactic. It looks like
he`s got one here. Here he is, sticking out his message of defending the
middle class today, sticking to it.

CHUCK TODD, NBC WHITE HOUSE CORRESPONDENT/POLITICAL DIR.: Yes.

MATTHEWS: He practically dared the Republicans -- let`s watch this
tape -- to hold tax cuts for the middle class hostage. He went back to
that word "hostage." Let`s take a look.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The other option is to
pass a law right now that would prevent any tax hike whatsoever on the
first $250,000 of everybody`s income.

And I hope Republicans in the House come on board, too. We should not
hold the middle class hostage while we debate tax cuts for the wealthy.

The most important step we can take right now, and I think the
foundation for a deal that helps the economy, creates jobs, gives consumers
certainty, which means gives businesses confidence that they`re going to
have consumers during the holiday season, is if we right away say 98
percent of Americans are not going to see their taxes go up.

(END VIDEO CLIP)

MATTHEWS: You know, I thought that was pretty well crafted as a
tactic -- I don`t know if it`s a strategy -- basically saying, Republicans,
we`re going to put a lot of pressure on you because a lot of middle class
people, 97 percent of this country, want those tax cuts kept. They to want
keep them. They want to go Christmas shopping, holiday shopping. Don`t
use the rich people and their purposes as an excuse to screw the middle
class.

TODD: That`s right. I mean, look, the one thing the president did do
is he did leave himself a tiny bit of wiggle room for Republicans and say,
Hey, I`m willing to listen to a compromise, if you don`t want to just move
all of the Bush tax rates up to the Clinton tax rates, essentially, from 35
percent to 39 percent.

Obviously, the president was making his case, Hey, that bill, it
passed the Senate. It`s sitting there. If the House passes it, then we`ve
passed the tax rates for the 98 percent.

MATTHEWS: OK...

TODD: Then have you this other debate. Now, he left himself -- what
was interesting there, when I pressed him about, Is this a red line, are
you not going to support any deal that doesn`t raise tax rates on the
wealthy, and he stopped short of that. And I think the reason is...

MATTHEWS: OK, let`s watch that, Chuck.

TODD: ... he`s trying to -- OK.

MATTHEWS: Let`s watch it because it was your question. Here, Chuck,
you asked him, as you just said, if there was room for a deal that didn`t
include -- did not include a return of the Clinton-era tax cuts of 39.6
percent for the wealthy people.

Here`s what the president said in response to you. Let`s watch.

(BEGIN VIDEO CLIP)

OBAMA: With respect to the tax rates, I just want to emphasize I am
open to new ideas. If the Republican counterparts or some Democrats have a
great idea for us to raise revenue, maintain progressivity, make sure the
middle class isn`t getting hit, reduces our deficit, encourages growth, I`m
not going to just slam the door in their face.

(END VIDEO CLIP)

MATTHEWS: Chuck, you`re sharp as hell on this, but let me suggest
another interpretation. He went in there with one goal, like Ronald Reagan
used to do. I want one headline, Don`t hold the middle class hostage. Let
them have their tax cuts.

MATTHEWS: He repeated it over and over again. He didn`t want the
headline to be...

TODD: He said "middle class" 19 times!

MATTHEWS: OK. And he didn`t want the headline to be switched by
perhaps adversarial press or even neutral press that didn`t want to go with
his line to say him adamant, president adamant on rich paying 39.6. Maybe
that`s why he softened up in his response to you. Just an alternative
interpretation.

TODD: Well, no, I mean, I can tell you I know what -- congressional
Republicans were happy with his response. I mean, they`d like to know that
there is some give.

And here`s where the give could be, Chris. Nobody`s talked about
this. I mean, there`s been some behind-the-scenes chatter on this, which
is you could see tax rates temporarily go up, just not all the way to 39
percent. It could be somewhere in the middle ends up being the compromise
for the one year.

Don`t forget, this is all about setting the tax rates simply for 2013
while they negotiate larger tax reform. So that could be what the wiggle
room is. Obviously, Republicans have said they don`t want to raise tax
rates at all. They`re fine with revenue. And the president`s sitting
there saying, I`m open to that. I`m open to listening to your ideas. I
don`t believe the math works without raising rates.

Well, what`s the middle ground? Raising tax rates halfway in between
35 and 39. I`m just saying that`s where you can find the middle ground,
the wiggle room, the potential as a way of giving -- the Republicans are
looking for an out on this. They need some sort of out.

They know they`re not going to win the fight simply on no raising of
tax rates at all. But I think they want to feel as if that there is some
give there. And the president, at least for now, rhetorically gave them
some room to work with.

MATTHEWS: Well, let`s talk about the Republicans right now. John
Boehner probably wants a deal. Can`t (INAUDIBLE) never figure him out.
He`s listening to the future...

MATTHEWS: ... he`s listening to his (INAUDIBLE) party -- they want a
deal. So do you think the Republicans are listening to the brains out
there, like Kristol and the other thinkers on the right side? Do you think
they`re willing to say, you know, We`ve defended the rich too long, just
like we`ve screwed the Hispanic vote too often, and we`ve not been open to
minorities generally and to women? This is one of the areas where they`re
going to say, You know what? You won the battle. We`re not going to keep
fighting for the rich. Is that conceivable in the next couple weeks?

TODD: I think the leadership -- here`s what I can tell you. When you
talk to leadership and you do some reporting on that, they want a deal.
They`re ready for a deal. And they`re not that far off.

The problem is, can you find a minimum -- let`s just say a minimum of
35 House Republicans who can commit themselves to voting for a raise of tax
rates. It would be and could be primary suicide for those 35 Republicans
because we know these gerrymandered districts -- this is no about swing
districts anymore. And that`s the -- that`s the problem Boehner has.

If Boehner had 35 to 50 safe Republicans, safe from a primary
challenge from somebody from the right on taxes, I think this deal would
have happened even a lot sooner. They might have gone ahead and passed
parts of -- most of that bill that came through the Senate. That`s the
issue here.

MATTHEWS: They have to schedule -- the thing about leadership is they
got to schedule a bill. That`s the tricky part.

Anyway, let`s take a look at this. There was a very interesting
moment in the press conference today, extremely interesting, when President
Obama was asked about comments from his former opponent, John McCain, who
made some nasty comments about Susan Rice, the United States ambassador to
the U.N. And she may well be the head of the State Department soon.

Here`s the president responding in a very personal way. I thought
this was really a moment here.

(BEGIN VIDEO CLIP)

OBAMA: But let me say specifically about Susan Rice. She has done
exemplary work. She has represented the United States and our interests in
United Nations with skill and professionalism and toughness and grace.

If Senator McCain and Senator Graham and others want to go after
somebody, they should go after me. But when they go after the U.N.
ambassador, apparently because they think she`s an easy target, then
they`ve got a problem with me.

And should I choose -- if I think that she would be the best person to
serve America in the capacity -- the State Department, then I will nominate
her. That`s not a determination that I`ve made yet.

MATTHEWS: Why don`t you be our U.N. interpreter right now and explain
all the elements of that amazing response.

TODD: Well...

MATTHEWS: It was personal. It was poignant.

TODD: Yes.

MATTHEWS: It was emotional. It was also careful because he said, I
may not make her the United States secretary of state, but I don`t want her
to get the idea or anybody in the world to get the idea if I don`t give her
the job, it`s because of Benghazi and that statement she made.

TODD: That`s absolutely right. Here`s the thing. This has bothered
the White House for weeks, the idea that Susan Rice is taking the fall,
taking these attacks, particularly from John McCain and Lindsey Graham,
because all she was doing -- she had gotten the same intelligence briefing
that members of Congress did, both Republicans and Democrats, that David
Petraeus signed off on, that Mike Morell, the current acting director of
the CIA wrote, the assessment what was shared with -- you know, that`s what
she was doing.

And so there are people in the White House, particularly the
president, but a lot of the support staff, who feel as if Susan Rice has
gotten a raw deal on this, that she has been a political punching bag, if
you will, over the last month-and-a-half because of the presidential
campaign, because of other things.

And so -- and this point, when McCain and Graham did their thing, this
was -- that`s why the president felt he needed to stand up for his U.N.
ambassador. There`s -- obviously, he was giving off an indication he`s
willing to have a confirmation fight, if they want to have one.

But there`s more to this, Chris. There`s more to this. And this goes
back to -- you know, McCain and Obama have not -- they never had a warm
relationship after the 2008 election.

TODD: McCain, I think, has been tougher on the president than in the
reverse. The president has sort of not taken the bait when McCain has hit
him, and hit him pretty -- pretty hard. And I think this was an indication
the president is ready to sort of fight back when indication the president
is ready to sort of fight back when it comes to McCain.

This is not a good relationship, and let`s not pretend that it ever...

MATTHEWS: OK, thank you.

TODD: ... has a chance of being a good one.

MATTHEWS: You know what it reminds me of? The way Nixon could never
deal with the fact that Kennedy was beloved. And he`d always go back and
try to find a way to smear his reputation over the Bay of Pigs, where he
called off the air cover. He was always digging for those jewels over at
the CIA.

(CROSSTALK)

TODD: It`s always been personal- I tell you, it feels like it`s
personal with McCain. I don`t know if it was ever personal before with the
president. Now it actually feels like it might be personal with the
president now, too.

MATTHEWS: OK.

TODD: It`s just -- it`s just one of those -- just like Kennedy and
Nixon.

Now joining us now is U.S. Congressman James Clyburn. He`s a
Democratic congressman from South Carolina and a member of the House
leadership.

Let`s talk about the real politics of equity, fairness, real
Democratic values, Congressman. You`re in the leadership. You`re going to
make the call. Does the president have to win -- I think he has to -- does
he have to win on making sure that the wealthy of this country get back to
paying what they paid under Clinton?

REP. JAMES CLYBURN (D), SOUTH CAROLINA: Absolutely. He`s just
absolutely got to win that, and I think he will win that. But let me say,
Chris -- thank you so much for having me. And may I say something about
Susan Rice?

MATTHEWS: Sure.

CLYBURN: I have a real, real problem with my senior senator trying to
make her a scapegoat in this. Susan Rice`s roots are in Florence, South
Carolina, that I got the opportunity to serve for almost 20 years in the
Congress. Her father, who -- Emmett (ph), who was born there in Florence,
didn`t leave there until he was 16 years old -- I have been a close friend
of his over the years. I`m a close friend with Susan Rice.

I think it`s absolutely a shame for this young lady, whose roots are
deep in South Carolina soil, to get sullied like this by my senior senator,
who I consider to be a good friend. Susan...

MATTHEWS: Well, let`s talk about motive here because, you know, it
does seem when a person makes -- even if you think a person made a mistake,
they were given the wrong brief and they offered up the brief -- they don`t
think she -- they haven`t said she made it up.

I mean, why is there this hostility to this young public servant, who
isn`t really much of a -- isn`t a politician even? She serves in the
foreign affairs capacity. She`s not in the arena with you guys. Why are
they treating her like she`s somebody to punch?

CLYBURN: That`s exactly right. This is a young African-American
woman, I`m going to say.

MATTHEWS: OK.

CLYBURN: And this is the kind of stuff that happened to Colin Powell.
Colin Powell was given information. He went to the United Nations with
information that we found out later was flawed. It was not his fault
then...

MATTHEWS: Well, I think he`s still mad...

CLYBURN: ... and it`s not Susan Rice`s fault...

MATTHEWS: ... about that. I think Colin Powell is still angry about
the crap they gave him to speak. That`s my feeling.

CLYBURN: And so am I.

MATTHEWS: Because I like him.

CLYBURN: I do, too. And I think that Susan Rice is getting a raw
deal here. Now, back to the politics...

MATTHEWS: Let`s talk taxes and the middle class and how the president
won. It seems to me that this president was crystal clear on looking out
for the middle class. If you`re rich, you`re going to have to pay a little
more. And those are the stakes on election night, and he`s claiming them
now. You know...

CLYBURN: He campaigned on the issues that he`s laid before the
American people. He`s talked about $1.6 trillion in revenues. I think Mr.
Boehner`s now talking about $800 billion, somewhere in between that, we
ought to get to.

And I do believe that the president is in a very good place on this
issue. I think the American people have demonstrated with their votes and
they continue to demonstrate with all the comments that I`ve heard that the
president is where the American people like for him to be on this issue.

Middle-income Americans have given a lot, and they have been giving
and giving and giving. Just look at this war -- or these wars that we have
fought. Basically, the people fighting in these wars, they`ve come from
middle-income America. We are talking about people who seem not to have a
vested interest in all of the sacrifices that are being made to get our
economy back on track.

So the president is right where the American people like for him to
be, and I hope and I feel that he will hold the line on these issues.

MATTHEWS: It`s great to have you on, sir. Such a great man. And I
mean that. And every time I hear you talk, I say, Yes, yes, yes.
Congressman James Clyburn, one of the leaders in the House of
Representatives. Thank you so much for coming on.

CLYBURN: Thank you so much for having me.

MATTHEWS: Coming up: Notes on a scandal -- we`re getting a little
tawdry now -- those e-mails, the letters, if you really have to hold your
ears, you know -- I don`t think you will, by the way. This is getting
fascinating -- the phone call now, the photo, new developments all around
this crazy David Petraeus story, involving our top general in Afghanistan,
the most recent head of the CIA, all involved in this strange, I don`t
know, quartet of relationships.

Also, liberals being liberals. How about this? No more, Don`t ask,
tell -- don`t ask -- don`t have (ph) tell about being a progressive or a
liberal? People run now as liberals. Five true blue liberals have just
been elected or re-elected to the United States Senate, and they ain`t
hiding it anymore. They don`t hide their colors. That`s changed.

And the other, the dogwhistle. It`s still whistling out there!
Listen to the co-chairs of Mitt Romney`s Wisconsin campaign saying Romney
would have won that state if only voter ID laws had been in place. Wow.
Think of what that`s saying.

By the way, since President Obama won Wisconsin by 205,000 votes, are
they saying 205,000 votes were stolen? What are they talking about out
there? They`re still pushing this issue. Are they admitting what we all
know, that Republican voter ID laws were merely an effort to suppress the
Democratic vote, the minority vote especially, and they failed? Tough
luck!

And think the Republicans are on the way to solving their problem with
Latino votes? Here`s the spokesman for the American Family Association on
why Latinos vote for Democrats.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It has to do with the fact that they are
socialists by nature! They come from Mexico, which is a socialist country.

(END VIDEO CLIP)

MATTHEWS: Yes, people are basically intrinsically ideological. Did
you ever know that one before? I`ve never heard that one before. Anyway,
there, that kind of talk, will win a lot of Hispanic votes, telling people
there`s something wrong with their political DNA.

Anyway, this is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Here it comes, the spoils of victory. Democrats in the
United States Senate will now have an effective 55 to 45 seat majority.
That`s because a senator like Angus King of Maine announced today, big
surprise, what many in Washington were expecting, that he`ll caucus for
leadership issues with the Democrats. That means he`s going to get
committee assignments with the Democrats.

King won a resounding victory, despite not actually saying out loud
which party he`d caucus with. But he endorsed President Obama for
reelection and was the subject of a negative ad campaign by Republican-
leaning outside groups.

The president answered questions today at his press conference for the
first time, in fact, on the scandal that has forced the resignation of his
CIA director, and took some time to offer strong praise, by the way, he
did, for Petraeus.

Listen to how well he praises this guy who has just been forced to
resign. I want to know why he did this, but, first, let`s see it.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: General Petraeus had an
extraordinary career.

He served this country with great distinction in Iraq, in Afghanistan
and as head of the CIA. I want to emphasize that from my perspective, at
least, he has provided this country an extraordinary service. We are safer
because of the work that Dave Petraeus has done. And my main hope right
now is that he and his family are able to move on and that this ends up
being a single side note on what has otherwise been an extraordinary
career.

(END VIDEO CLIP)

MATTHEWS: Well, we know so far is that David Petraeus, the general,
had an affair with his biography here, Paula Broadwell -- you`re looking at
her -- that came to light after the FBI began investigating harassing e-
mails sent anonymously to another woman, Jill Kelley, a Tampa socialite and
a friend of Petraeus.

The FBI eventually found out it was Broadwell, that woman right there,
who was sending those e-mails.

"The Washington Post," by the way -- that`s according to "The
Washington Post." The e-mail described Kelley as a -- I don`t know how
they do this -- as a seductress. That`s according to what Broadwell said
about the other woman, accused her of having an intimate affair --
relationship with Petraeus.

For more on where things stand, we`re joined by serious reporters, NBC
News chief White House correspondent -- chief -- well, it isn`t. it`s Mike
Isikoff, who is the chief investigative reporter. And, of course, we have
got David Corn now, who`s on the show now from "Mother Jones."

Let me -- let me talk about this, first of all. I thought it was
interesting the president of the United States to give almost a complete
Snow White description of this guy. He referred to the affair, which is
the reason he`s being removed from office, as a single side note.

I mean, Bill Clinton went through -- he was keel-hauled for five years
over this.

DAVID CORN, MSNBC POLITICAL ANALYST: Yes, yes, yes.

(CROSSTALK)

MATTHEWS: And this guy get a single side note.

CORN: It`s just a pesky asterisk.

But, you know, politicians and presidents for years in Washington have
been using David Petraeus as cover. If you can get underneath -- wrap
yourself...

MATTHEWS: Republicans said that name over and over.

CORN: Wrap yourself in the Petraeus flag and you got immunity from
almost anything.

MATTHEWS: But what is President Obama worried about with Petraeus?

CORN: I think it`s sort of force of habit. I think he`s being kind
of gracious now.

And I think there may be a little buyer`s remorse here that some
people once you get into the details of this wacky situation, they`re
thinking maybe he shouldn`t have resigned.

MATTHEWS: He should have stuck with him.

CORN: Maybe he should have stuck with him. Maybe everything moved
too fast. Maybe he`s -- he did what he did, but maybe he`s the victim of
some other...

(CROSSTALK)

MATTHEWS: OK. Before you jump to that -- and I am the -- the more --
the older I get, the more lenient I get towards these peccadillos, if you
will.

CORN: Lenient?

MATTHEWS: The problem is, if it got out, if it got out that he had
had this affair with this reporter and it also got out that the president
knowing about it had kept him in office, what would that have been like?

CORN: The only way he could stay -- the only way you can do this is
if you actually make a clean breast of it, say you`re sorry, you won`t do
it again.

(CROSSTALK)

MATTHEWS: Tell the country that?

CORN: Tell the country that. It`s what Bill Clinton did.

MATTHEWS: But he was impeached.

(CROSSTALK)

MICHAEL ISIKOFF, MSNBC CONTRIBUTOR: Under a little pressure.

(LAUGHTER)

(CROSSTALK)

MATTHEWS: OK. Let`s go to the latest developments in this.

This Mrs. Kelley, Jill Kelley, she`s married. She is the one that was
involved in being apparently -- she was scaring this other woman who was
having the affair with Petraeus, thinking she might be involved, whatever
that was about. She complained to an FBI agent. This is where it became
official, complained, this Jill Kelley, complained to an FBI agent...

MATTHEWS: ... was being harassed. Let`s stay here, was being
harassed.

And then she does this call. She called 911 one weekend complaining,
that was Jill Kelley. She tried to invoke diplomatic privilege to get the
press off her lawn.

(LAUGHTER)

MATTHEWS: Let`s listen to this. This is a little strange.

(LAUGHTER)

(BEGIN AUDIO CLIP)

JILL KELLEY, TAMPA, FLORIDA: I`m an honorary consul general, so I
have inviolability, so they shouldn`t be able to cross my property. I
don`t know if you want to get diplomatic protection involved as well, but
now -- because that`s against the law to cross my cross my property,
because this is now like -- you know, it`s inviolable.

ISIKOFF: All right, look, we got a briefing from a source close to
Jill Kelley this evening that sheds a little light on the origins of this
and how this came about.

And the initial e-mail that triggers the concern comes from -- an
anonymous e-mail from a Kelley Patrol to General Allen in Afghanistan,
warning him about his relation -- about his relationship with Jill Kelley
and about an upcoming meeting they are going to have in Washington, which,
in fact, they were going to have, she -- Jill Kelley and her husband were
going to have with General Allen.

That -- she -- General Allen then turns that over to both Jill Kelley,
saying, what`s this all about? Did you send me this? What are you talking
about?

MATTHEWS: Yes. Why is she an object of suspicion, because she has a
Lebanese background or what? Why are people all buzzing around her and
bothering her in these personal relationships?

(CROSSTALK)

ISIKOFF: Well, look, we don`t know what set Paula Broadwell off, whom
we now to have been -- to have sent that e-mail.

But we understand a little bit more about what it was that triggered
the concern of Jill Kelley, of General Allen and the FBI, because they`re
talking about something that is not publicly known, the general in
Afghanistan is going to have a meeting with a woman in Tampa. And then
there`s subsequent e-mails, about three or four...

MATTHEWS: Quickly.

ISIKOFF: ... more, along the same lines, including one about a
meeting she is going to have with David Petraeus.

MATTHEWS: OK. I want to ask you both, guys, I want to ask you my
favorite question in journalism. And I want a quick answer.

Hundreds of e-mails. We don`t know exactly what he said. If he was
just flirtatious with this woman and he still is commanding a war and doing
a good job, why would you bounce him for that?

ISIKOFF: A source close to Kelley characterized those e-mails this
evening, saying, first of all, there`s a handful that are problematic that
some might consider flirtatious, some might consider inappropriate, that
maybe General Allen had a glass of wine more than he should have, but not
overtly sexual, not sexting.

So, make of that what you will, but I`m just telling you what they`re
saying about the e-mails.

(CROSSTALK)

CORN: Your "So what?" question is important, because what happened
here is the FBI got this tip, started looking, and things just sort of
cascade from there. Once you bring in the FBI and...

(CROSSTALK)

CORN: ... they start through computers, they can find a lot of
different things.

MATTHEWS: Can I ask you about -- OK, last question I`m getting -- I
hear from progressives. They call me, they e-mail me, they talk to me.

MATTHEWS: There`s some suspicion out there on the part of a friend of
mine that this is the FBI, a guy who has political point of view, he
brought this all up to the members of Congress, he brought it to Reichert.
He got to Cantor because he wanted to hurt the administration.

CORN: I`m not sure it was political. He certainly was trying to make
time with Jill Kelley. And he had an obsession and he was taken off that
case.

ISIKOFF: That does not conform with the facts as we know them.

MATTHEWS: Well, you have got to follow these leads. You know?
That`s who we learn things around here.

(CROSSTALK)

MATTHEWS: Anyway, thank you Michael Isikoff. Thank you, David Corn.

Not every road leads to heaven.

(LAUGHTER)

MATTHEWS: Up next: Jon Stewart has got something to say about those
petitions, by the way, asking that certain states be allowed to secede.
What a waste of paper. That`s ahead.

Yesterday, I told you about those angry petitions to the White House
asking that certain states be allowed to secede from the union now that
President Obama has been reelected. Well, Texas was the leader of the pack
with one petition counting 70,000 signatures by yesterday afternoon.

Jon Stewart weighed in.

(BEGIN VIDEO CLIP, "THE DAILY SHOW WITH JON STEWART")

JON STEWART, HOST, "THE DAILY SHOW WITH JON STEWART": I think I can
best express how I feel about these states and people in the words of the
great William Wonka.

STEWART: ... I`m beginning to understand why Southern states were
always so hesitant to get rid of the Confederate flag. It`s like keeping
your fat pants after you lose some weight.

(LAUGHTER)

STEWART: You`re happy for now with the new you, but pretty soon
you`re going to need those fat pants again.

(LAUGHTER)

(END VIDEO CLIP)

MATTHEWS: And then there`s the issue of the Latino vote which many
Republicans say they need if they have any hope of winning back the White
House.

Listen to Bryan Fischer. He`s spokesman for conservative American
Family Association, they call themselves, and you realize why the GOP`s
problems with Latinos run very deep. Wait until you hear this guy.

(BEGIN VIDEO CLIP)

BRYAN FISCHER, AMERICAN FAMILY ASSOCIATION: Hispanics are not
Democrats, don`t vote Democrat because of immigration. That`s not the main
reason why they vote for Democrats.

It has to do with the fact that they are socialists by nature. They
come from Mexico, which is a socialist country. They want big government
goodies. It`s primarily about that. Now, they want open borders, make no
mistake, because they have got family and friends that they want to come up
and be able to benefit from the plunder of the wealth of the United States,
just as they have been able to do.

Stocks skid amid worries about the fiscal cliff and Middle East
tensions, the Dow sliding 185 points. The S&P drops 19. The Nasdaq falls
37 points. Oil prices jumped more than 1 percent after Israel launched an
operation against militants in Gaza, killing Hamas` military chief. As for
the economy, retail sales fell in October, the first decline in three
months. And producer prices slipped last month, the first drop since May.

That`s it from CNBC, first in business worldwide -- now back to
HARDBALL.

(BEGIN VIDEO CLIP)

QUESTION: Do you think photo I.D. would have made any difference in
the outcome of this election?

We`re looking at all sorts of different precincts and all sorts of
same-day registrations. And I know people will go, oh, we don`t have fraud
and abuse in our election. But why -- why can`t we have voter I.D. when
majority of our people in Wisconsin want it, we passed it, the governor
signed it? Why should one judge in Dane County be able to hold it up?

(END VIDEO CLIP)

MATTHEWS: There you have the problem with the Republican Party. Pay
a lot of attention to that what that woman just said, that state senator.
That`s the state -- Wisconsin State Senator Alberta Darling.

I don`t know her. She served as Mitt Romney`s co-chair in the state
and now she`s saying suppressing the vote by requiring voter -- photo voter
I.D. cards would have made the difference in Wisconsin.

Well, let`s look at the facts here. Apparently, she`s not interested
in the fact. Obama won Wisconsin by 205,000 votes, 200,000 votes-plus.
She`s saying there that that was stolen, that they stole, the Democrats,
through same-day registration, poor people, whoever came in the state, they
live there, they stole over 200,000 votes.

Anyway, Paul Ryan expressed -- there`s more of this dog whistle crap
going on. Here`s Paul Ryan expressing his surprise at the pro-Obama
turnout in an interview Monday. That`s just two days ago. Well after the
election, they`re still talking like this. Let`s listen to Ryan here.

(BEGIN VIDEO CLIP)

REP. PAUL RYAN (R), WISCONSIN: We were surprised with the outcome.
We knew this was going to be a close race. We thought we had a very good
chance of winning it.

I think the surprise was some of the turnout, some of the turnout in -
- especially in urban areas, which definitely gave President Obama the big
margin to win this race.

MATTHEWS: Well, Cynthia Tucker is a visiting professor of journalism
down at the University of Georgia. And Joan Walsh is editor-at-large for
Salon and author of Hampton Pearson "What`s the Matter with White People."

By the way, that question seems apt again tonight.

(LAUGHTER)

MATTHEWS: Anyway, "The L.A. Times" has just posted a report on Mitt
Romney`s press conference call -- a conference call, rather, today with top
donors.

It says Romney -- quote -- "attributed his rival`s victory to -- quote
-- `the gifts` the Obama administration had given to blacks, Hispanics and
young voters during Obama`s first term. Obama, Romney argued, had been --
quote -- `very generous`" -- close quote -- or quotes around it -- "to
blacks, Hispanics and young voters."

Cynthia, I once heard a Canadian election guy with a French Canadian
nationalist was saying they lost the election to the people that wanted to
stay as part of Canada because of ethnic voters. That means non-French,
non-English.

This guy, Paul Ryan, who I don`t think is right for prime time yet by any
means talking about the urban vote. Now, they won the other side because
they got the most votes. Because they won fair and square, which is the
first thing Ryan said.

Why do you have to step on his own headline, they won fair and square
by saying, oh, it was the black vote? Basically, that`s what he`s saying.

CYNTHIA TUCKER, UNIV. OF GEORGIA: Chris, let me just say, as for
Romney`s comments, I`m still waiting for my gift.

MATTHEWS: You mean you may have voted for him without getting that
thing in the mail that he was supposed to send everybody?

WALSH: Maybe Chris has it.

TUCKER: I did not get my gift.

But let me just say the comments that you have focused on encapsulate
the Republicans` problems. And while we have -- pundits have been
speculating that Republicans have finally learned their lessons, they have
to stop being so disrespectful to large blocs of voters, they have not
learned. They cannot stop being disrespectful and dismissive.

This business of urban vote -- Chris, you`re an urban voter. You
live in a city, don`t you?

MATTHEWS: Actually, I live two blocks outside a city, but I spent
most my life living either in Philadelphia or in Worcester, Massachusetts,
in college, which is a city, or in Washington, D.C. for many, many years,
yes.

TUCKER: I mean, this is just nonsense. They cannot speak of us as
Americans, as voters. And we understand that. And that`s the reason so
many black and brown people, and so many white voters, by the way, don`t
vote for the Republican Party.

MATTHEWS: Yes, I think that was well said. I think a lot of white
people are turned off by this old style stuff.

Joanie, my question to you, my dear friend, how do you explain
Romney, who left the stage with such grace on election night, I will pay
tribute to that forever the way he did it, now going back over this again,
saying they bought the minority vote.

This is the kind of thing he was saying during the campaign,
remember? He was saying, remember, he said they get rid of work
requirement for welfare because he had to pay off his base. He was -- the
feeding of the base, the feeding of the base. It`s a theme he`s still
pushing.

WALSH: Why does he say it, Chris? Because he really believes it.
They really believe that this is what it`s all about and we`ve all been
paid off. And as Cynthia says, I`m still waiting for my gifts, too.

But the thing that really irks me about this, to listen to those two
people from Wisconsin speak so dismissively of their own population and
their own state -- I mean, Paul Ryan lost his own district, lost his city,
his hometown. Let`s just say that -- which is not a particularly urban
place. But I cast --

MATTHEWS: Two hundred thousand vote thieves -- 200,000 in his own
state.

WALSH: And I cast my first vote for Jimmy Carter in suburban
Milwaukee. I went to high school and college in Wisconsin. We are proud
of our tradition, of broad public participation in the vote, Chris. Those
are -- Wisconsin --

MATTHEWS: And clean elections, too.

WALSH: And clean elections. Wisconsin and Minnesota have the two
highest rates of participation. And that used to be something to proud of
as a Wisconsin resident. They are mad because they got their butts kicked
by a resurgent Democratic Party in the state, which out-organized them.
That`s what it`s all about.

MATTHEWS: You know, Teddy White when he wrote "Making the President"
back in `66, when you have votes in states like Wisconsin and Minnesota,
you can count on the vote being exactly right.

Let me go back to Cynthia.

Cynthia, there are people out there will say Matthews, and you and
Cynthia, you hear that dog whistle when it`s not even there. And I`ll tell
you -- maybe, maybe, maybe, you can argue that, but if you put it all
together and listen to it over and over again from Sununu`s talk of lazy,
to this talk about Obama belongs in Kenya, the illegal immigrant, to this
latest character we just had a few minutes ago. Did you hear about the guy
-- the Christian right wing guy that came on and said that the reason
Mexican Americans are socialist is because it`s somehow in their blood
because they come from a socialist country.

Wait a minute -- Arnold Schwarzenegger is from socialist Austria.
It`s the reason he left. It could be they want to live in a country with
more freedom and less government. I don`t know.

But a lot of people in the United States I grew up with, from Polish
backgrounds and other backgrounds, they come from that -- Ukrainian
backgrounds, they want the Catholic school, all these guys, they all came
from left wing -- hard left wing communist countries and they`re the
opposite.

So, this idea you can trace people`s ideological DNA through their
migratory roots is insane.

Your thoughts?

TUCKER: It also shows how very little they understand their fellow
Americans and how very little they`re trying to understand. You know,
Chris, what it says to me, a lot of the nonsense that we heard over the
election -- the welfare ads and all of that -- I thought they put that
nonsense out there to satisfy their base.

Now, I`m understanding how many of the Republican strategists really
believe --

WALSH: Yes.

TUCKER: -- those ugly stereotypes about voters of color.

And let me further say, Chris, that it isn`t just the nonsense we
heard in this election. Black Americans have understood, have heard
Republicans speak disrespectfully of us for the last 50 years.

Now for the last five to seven years, Latinos have been hearing the
same thing.

MATTHEWS: Yes.

TUCKER: If you continue to talk about us in this stereotypical,
dismissive manner, we get the message. You don`t want us in our party --
in your party. And, of course, we are not going to give you our votes.
It`s as simple as that.

WALSH: Right.

MATTHEWS: I love the way they just say, and I use that sarcastically
-- were your votes stolen or were they bought? That`s a nice debate in the
Republican Party. We can`t decide whether they bought their votes or they
stole them. That`s how -- anyway, I make it funny because it`s horrible.

Cynthia, I love your passion. I love your truth. Thank you so much.

Joan, too. The name of your book?

WALSH: "What`s the Matter with White People?"

MATTHEWS: It seems to be absent tonight`s discussion.

WALSH: Thanks, Chris.

MATTHEWS: Up next, five guys (ph) that are liberals were sent to the
United State Senate last week. No more "don`t ask, don`t tell" -- meaning
your ideology is out there on your mettle. You just say, I`m a liberal.
No more I`m a sort of a moderate, whatever. No, you can say you`re liberal
now and you can win.

You know, this year and some of the marquee U.S. Senate race is the
Democrats didn`t run as reluctant Democrats, you know, employing the DNC-
approved type of Clintonian triangulation to appeal to voters. They just
ran full bore as liberals.

Here are some of the newly elected senators who ran unapologetically
on the left side and won. Elizabeth warren in Massachusetts -- of course,
you have a battler against Wall Street there. Tammy Baldwin in Wisconsin,
Chris Murphy up in Connecticut and Mazie Hirono in Hawaii.

How`s this going to change things once they get there, the fact they
have run so clearly progressives?

Jonathan Allen covers Congress for "Politico", and Susan Milligan
writes for "U.S. News and World Report."

Susan, you first. You know, you know politics like I do. And I
think it`s fascinating in all these years of not being openly liberal
saying things, well, I`m a moderate, maybe progressive came in as a bit of
euphemism for a while there. What`s going on here?

The fact that these people -- I`m looking at -- there is no doubt
Elizabeth Warren is going to have a high ADA rating. She`s going to be a
liberal. There`s no doubt, I don`t think, about Tammy Baldwin, Murphy or
Mazie Hirono -- generally, these people aren`t saying, you know, I`m sort
of a moderate, I`m somewhere in the middle. They are saying, you know,
we`re progressives, we`re liberals, big deal.

SUSAN MILLIGAN, U.S. NEWS & WORLD REPORT: Right.

Well, I think what`s happening is while the Republican Party was
having its own kind of implosion figuring out who they were the Democrats,
in fact, were kind of coming home and getting back to the core of who they
were. So now you have the Republicans trying to figure out how to expand
their base, whatever their come to Jesus moment, or actually come to Jesus
moment when they kind of try to draw on Latinos more, the Democrats
actually got back to the core principles that define them as the Democratic
Party.

I think we saw this with the Democratic National Convention, with
speeches by Deval Patrick, by President Clinton, by Mayor Castro, really
talking about who and what they are as Democrats. And that`s what they are
going to be.

JONATHAN ALLEN, POLITICO: Howard Dean would call it the Democratic
wing of the Democratic Party. You`ve got all these candidates who now
believe that there is a justice message, a fairness message. That`s a very
populous message that Barack Obama tapped into in 2008.

Remember all these candidates were running with him this year, a lot
of them synthesized their messages with him, sometimes a little bit to the
left, sometimes a little bit to the right. But they are coming in as Obama
Democrats into the Senate.

And he`s going to have some more forceful people in places like
Wisconsin where you got a Tammy Baldwin replacing the much older Herb Kohl,
who`s pretty liberal but not a champion for liberal causes. Mazie Hirono
replacing Daniel Akaka in Hawaii, the same thing. Elizabeth Warren in
Massachusetts replacing Scott Brown -- what a change from a moderate
Republican to a very liberal, consumer-focused Democrat.

MATTHEWS: Yes.

ALLEN: And Chris Murphy in Connecticut doing the same thing,
replacing Joe Lieberman. You know, very moderate guy, often voted with
Republicans. Chris Murphy, not so much.

MATTHEWS: Yes, I was with Michael Dukakis today in Massachusetts.
He`s teaching up at Northeastern. Susan, you know that. And he`s working
with a cause I was up there with today, helping people get medical -- legal
protection for medical situations.

And he -- he was killed for being a liberal. I don`t think you can
run those campaigns against Democrats to say, oh, he`s a liberal, that`s
the end of the argument, you know?

MILLIGAN: Well, isn`t that part of it, Chris? That they were
apologizing for it all the time and that doesn`t really get you anywhere.

The important thing though when we talk about what`s happening on the
Hill is that you don`t have to be a moderate to be a good negotiator. With
some exceptions like Olympia Snowe, obviously, a moderate who`s a great
negotiator. Some of the best negotiators on the Hill have been liberals or
conservatives. Ted Kennedy, Orrin Hatch --

MATTHEWS: That`s my speech today, which is your best constituency is
your conscience. And if you really believe, unlike Romney, you really
believe in something, you know how to negotiate. You don`t have to pretend
to Grover Norquist, you`re one of his robots.

Anyway, thank you, Jonathan. I wish we have more time. We will next
time.

Susan Milligan, as always.

When we return, let me finish with what President Obama can expect to
see tomorrow when he visits the devastated areas up near New York City, in
New York City from hurricane Sandy.

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Let me finish tonight with this:

Tomorrow, President Obama goes to the storm-devastated parts of New
York. My protection is that he will be devastated himself by the tragedy
that seems to grow worse especially as the temperature drops toward
December. Again tonight, I`m going to ask you to take out a pen or a
pencil and be ready, you might be able to help yourself with what the
president sees tomorrow.

I hope the president sees too the amazing network of people
attempting to help the victims out there on Staten Island and Brooklyn, and
the nastily hit parts of Queens like Rockaway and Breezy Point.

Let`s take Rockaway, an area where nearly every family has a fire
fighter in the family, a police officer, sanitation worker, some of the
other public servant. And yet, they continue to suffer through the
aftermath of this disaster and the bitter cold without even the basics of
human life like heat, clean water or beds to sleep in. You won`t believe
how bad it is up there.

I said I want to tell you about the people who are working to help
the victims of Sandy and the nor`easter that came in on its heels. There
is a church in the Belle Harbor section of Rockaway, Saint Francis de
Sales. That`s a familiar name to Catholics, of course.

Saint Francis de Sales, has set up a relief center that`s doing a
huge service to the people there. It`s helping people get access to
generators and other ways to get back into their homes, to get people back
on their feet.

If you want to help this local relief effort, Saint Francis, you can
send a contribution to Saint Francis de Sales Parish. Saint Francis de
Sales Parish, 129-16 Rockaway Beach Boulevard. That`s Rockaway Beach
Boulevard. Belle Harbor, New York, 11694. Take a look it. Write on the
check "relief effort."

These local groups are doing the kind of inspiring volunteer work
that seems in our country to come about when bad things happen to good
people. And I hope the president gets a look at the efforts when he`s in
the New York area tomorrow.

That`s HARDBALL for now. Thanks for being with us.

"POLITICS NATION" with Al Sharpton starts right now.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY
BE UPDATED.
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